The moment has come for the EU to review one of the main pieces of legislation that influenced the EU biofuels and transport policies in the last few years: the Renewable Energy Directive (RED). A public consultation was launched in November 2015 along with an Inception Impact Assessment, which highlighted the options that the Commission is considering for the review.
The legislation should be adapted to the new EU 27% target for renewables set up by the 2030 Climate and Energy strategy. No national targets were agreed. This means that the European Union as a whole has committed to increase the share of renewables in the energy consumption by 27% compared to 1990 levels, but that Member States will have to negotiate to split the cake.
27% is not such an ambitious target, but the most worrying element in my perspective is the lack of a transport target in the options considered by the Commission for the review. It seems therefore that as of 2020, there will no longer be what I consider the best way to promote renewables in transport. Overall, I am not sure we can draw any conclusions on a legislation which implementation was paralyzed for almost 4 years because of the highly polarized ILUC debate.
In any case, I submitted this morning, on behalf of UNICA, the response to the consultation and my three key messages are:
Liquid fuels will still dominate the market and they need to be decarbonized – By 2030, the share of liquid fuels in the European Union is still expected to account for 93% of all energy in transport. This means that the Commission needs to promote the use of cleaner liquid fuels if it wants to decarbonize transport – electricity alone cannot make it by 2030. Technologies to achieve this goal, such as sustainable biofuels, already exist and should be promoted along electrification.
Sustainable biofuels should be promoted – Mandatory targets, or obligation on fuels suppliers, remain the best way to incentivize RES in transport. In fact, liquid fuels fully depend on traditional fuels suppliers to distribute their products. The market power of these operators is too large for biofuels to compete. A mandatory target, or an obligation on fuels suppliers, is the only way to force them to place clean liquid fuels on the market. In addition, to promote the competitiveness of sustainable biofuels, they should be taxed in a fair way, that is on the basis of their energy content instead of energy volume.
Higher bioethanol blends will have a positive environmental and economic impact – Ethanol high blends, such as E20, E85 and ED 95 for heavy transportation, should be promoted, as alternative fuels. This technology, developed by European companies, already exists and has positive track record in Brazil. Sustainable ethanol high blends reduce emissions by 90%, they are scalable, they need minimal change in infrastructure and they are less costly than other solutions. In addition, they reduce local pollutants compared to diesel.
I hope these points are duly taken into consideration in the evaluation of the consultation responses and further on in the review process. I will certainly continue repeating that we need to be realistic about what the future may look like and give space to the more sustainable resources, without harming the overall competitiveness objective.
A seasoned professional specializing in international trade policy, Géraldine Kutas leverages over a decade of experience to strengthen UNICA’s activities across the European Union, the United States and Asia. She has a deep expertise in biofuels and agricultural policies, coupled with extensive exposure to multilateral and regional trade negotiations in agriculture. Ms. Kutas is the author and co-author of several international publications on these topics.
Before joining UNICA, she was a researcher and a professor at the Groupe d’Economie Mondiale at Sciences Po(GEM), Paris, and coordinator of the European Biofuels Policy research programme (EBP). Ms. Kutas has also worked as a consultant at the Inter-American Bank of Development and for agro-business firms.
Ms. Kutas has a Ph.D. in International Economics from the Institut d’Etudes Poliques de Paris and a Master degree in Latin American Studies from Georgetown University, Washington DC.